Congress Finalizing Stimulus Plan – $1,200 Direct Payments to Many Adults, $500 per Child

Congress is finalizing its latest stimulus plan in response to the significant economic impact being felt by many Americans as a result of the coronavirus mitigation efforts.

Update 3/25/2020*

As the bill stands now, here are the main provisions for direct cash payments to individuals:

• Up to $1,200 per adult, married couples eligible for up to $2,400
• An additional $500 per child

Payments will scale down for individuals who make more than $75,000 per year and couples that make more than $150,000 per year.

Income will be based on 2018 federal tax returns.

Individuals making more than $99,000, and households that make more than $198,000 will not be eligible for direct assistance.

Initial plans are to provide two rounds of direct payments, the first to be on or around April 6, 2020, and the next on or around May 18, 2020. *The most recent version of the bill appears to call for only one payment.*

This direct financial assistance is in response to what amounts to a sudden shut down of many U.S. businesses, and the resulting loss of income for many workers as a result of the efforts taken to curtail the coronavirus’s spread.

Additional assistance will flow to business in an effort to maintain some stability for the U.S. economy.

The specifics of business assistance are still being hammered out, but below are some of the initial proposals.

• $50 billion to passenger air carriers
• $8 billion for cargo air carriers
• $150 billion for other large businesses
• $300 billion for loan guarantees for small businesses

The current version of the legislation includes some non-financial provisions as well, including:

• Extending the tax filing deadline for 2019 tax returns to July 15, 2020 – Accomplished by Executive action, tax filing (and payment) deadline now officially July 15, 2020
• Removing estimated tax payment requirements until October 15, 2020
• Allow employers to defer payroll tax payments until 2021 and 2022

Expect some of these provisions to be hotly debated before a final bill is passed. Meaning, everything listed above is subject to change.

*There definitely have been changes. The specifics of those changes have not yet been released, and likely won’t be fully available until final votes are cast in both the U.S. Senate and House.*

Movement on the prior two coronavirus-related bills – $8.3 billion for vaccine development and $100 billion for paid sick leave – has been surprisingly quick, though.

I would expect a final bill to be sent to President Trump early next week at the latest.

*This timeline has been extended as a result of Senate Democrats voting against bill consideration until further negotiations could be accomplished.*

If not, our elected leaders really need to be held to account.

image courtesy of Stuart Miles Freedigitalphotos.net